ILS market update: August 2021

When all was said and done, the market saw USD 8.5bn in new issuance, a half-year record.

Riding the momentum from its resilient performance through 2020, the ILS market saw growth opportunities in the first half of this year.

ILS spreads started the year at relatively attractive levels versus credit spreads. After a robust performance through 2020 which demonstrated once again low correlation to other asset classes, conditions were ripe for new inflows of capital to the ILS market.

With new capital raised, many primary new issues were heavily oversubscribed and upsized, while also testing lower spread levels than originally announced. This trend continued through the first half of 2021, and when all was said and done the market saw USD 8.5bn in new issuance, a record for a half-year period.

With strong issuance recorded, it’s no surprise that the overall catastrophe bond market (measured by bonds outstanding) has also grown significantly over the period, by USD 2bn according to our calculations. This keeps the market on trend for nearly 10% growth per annum since 2011.

ILS market update: August 2021